Talent at the Top

China's human capital

Human capital plays an important role in the theory of economic growth, but has been difficult to measure. We survey the literature on cross-cultural IQ tests and conclude that intelligence tests provide one useful measure of human capital. Using a new database of national average IQ, we show that in growth regressions that include only robust control variables, IQ is statistically significant in 99.8% of these 1330 regressions, easily passing a Bayesian model-averaging robustness test. A 1 point increase in a nation’s average IQ is associated with a persistent 0.11% annual increase in GDP per capita. Garett Jones & W. Joel Schneider

The West has 30,000 citizens whose IQ¹ of 160 equips them to do highly innovative work in quantum physics, mathematics and anything that interests them. China has 300,000 of them and, because the Chinese always hire geniuses run their country, they all work for the government.

Every year the top 10% of Chinese university graduates, one-million youngsters, take the national civil service examination and the smartest 27,000 are accepted. Those with political ambitions are sent to live in the poorest villages until they raise average incomes by 50%. If they repeat that at scale for a quarter century they might make it to Beijing, as Xi did.

Xi Jinping began his cursus honorum at the same age as Cicero, being elected Village Party Secretary at nineteen – because he could read. His KPIs were excellent for 25 years and, along the way, he picked up a Master’s in Marxist economics and a PhD in rural marketization, his father’s forte. Xi bears ultimate responsibility for the same KPIs and Five Year goals as his governors. (African developmental economist and Oxford PhD Dambisa Moyo, attending a conference in Beijing, was astonished to find herself invited to tea with Xi, where they spent half an hour discussing Chinese aid failures in Africa).

Human Capital

Recently, two geniuses – one ran the space program, and the other who designed its rockets – were made Provincial Governors², responsible for 5% economic growth in their provinces, for environmental improvement, for a dozen KPIs, and for delivering their share of the Five Year Plan. In preparation, they spent a semester at the world’s most exclusive university, the lakeside campus of the Central Party School in Beijing, where they hung out with world thinkers (who earn small fortunes for giving seminars there). A Hungarian economist said that when he saw his honorarium check, “My hands shook. I actually wept. I paid off the mortgage, bought my wife a car, and put the rest in the bank”.

Despair

President Trump despaired, “People say I don’t like China? No, I love them! But their leaders are much smarter than ours. And we can’t maintain ourselves against that. It’s like playing the New England Patriots and Tom Brady against your high school football team.” His elaboration on Xi’s personal qualities is interesting:

Us

Though 30,000³ Westerners have 160 IQs, none will ever run a city, let alone a country. Honesty is fatal in our politics, and smarter people, for obvious reasons, tend to be more honest. In addition to their lower intelligence, education and morality, our officials have never accomplished anything beyond winning an election, as their disastrous policies make clear. They are accountable to nobody and have no measurable goals.

As Lee Kwan Yew⁴ warned, there’s no way on Earth the West can compete with China, “The size of China’s displacement of the world balance is such that the world must find a new balance. It is not possible to pretend that this is just another big player. This is the biggest player in the history of the world”.

If you’re interested in how China actually works, read Why China Leads the World: Talent at the Top, Data in the Middle, Democracy from the Bottom. To learn how Chinese officialdom works, read Dean of Shandong, whose author, Daniel Bell, was a Chinese Government official in this lifetime.

1. IQ is distributed logarithmically and since China’s national IQ is 105, its 1.4 billion citizens harbor 300,000 of them. 95% of us have IQ’s under 130, so theoretical physics is probably beyond us.

2. There are typically 3 levels of civil service between a provincial governor and the President of China. At the provincial level, the governor is considered a level-1 official. Above the governor are level-2 officials who are responsible for larger regions or multiple provinces, such as the vice-ministers in various ministries of the central government. Level-3 officials are the highest-ranking officials in the country and are responsible for national policies and decision-making. The President of China is a level-3 official.

3. Because China’s median IQ is 106+ and the West’s is 100, and because IQ is logarithmic and because China has twice as many people as the West.

4. Lee graduated at the top of his year at Cambridge – he was a genius who ran his country well. His Prime Minister son outshone him by topping Cambridge in mathematics. A local minister said Singapore will succeed if it keeps Prime Ministerial IQ above 130. China’s has probably been above that since 505 AD.